Australia and the European Union have signed a critical minerals trade deal to try to discourage Chinese monopolization of the critical minerals supply chain.
The agreement was signed today (May 28, 2024) with six months of “concrete action” promised by Australian and European politicians, including plans to make mining of crucial minerals more sustainable.
SIGNED 🇪🇺🤝🇦🇺! The EU and Australia have signed a new partnership in critical raw materials.
🌏This MoU is a leap forward in securing more sustainable critical raw materials for the 🇪🇺, while boosting investment in Australia.
More 👉 https://t.co/LjgV4R3St6 pic.twitter.com/jfqxTPbIAd
— Valdis Dombrovskis (@VDombrovskis) May 28, 2024
Thierry Breton, EU Internal Market Commissioner, said the deal would consolidate the EU and Australia’s crucial mineral market.
“[The agreement] will stimulate collaboration, investment and business opportunities. We aim for more sustainable and responsible production and true industrial integration of value chains between the EU and Australia, supporting competitiveness,” he said.
Looking ahead, Breton said the EU must now work with governments and the private sector to create investment opportunities.
In its 2024 thematic intelligence report on supply chain disruptions, research and analytics firm GlobalData reported that global supply chain disruptions were becoming more frequent and severe.
Armed conflicts, such as Russia’s invasion of Ukraine, and climate change had continually disrupted the supply of crucial minerals in 2022 and beyond.
GlobalData noted that the supply chain disruption since the 2020 Covid-19 pandemic is unprecedented.
As a global manufacturing center, China has experienced rapid GDP growth for more than three decades and many crucial minerals needed for green technology are mined by China.
China has invested heavily in critical mineral mines in countries like Australia to dominate the supply of green technologies such as batteries for electric vehicles.
Despite existing US efforts to decouple from China, GlobalData’s report concluded that it may be impossible for any country to completely decouple from Chinese influence over crucial minerals.
The Chinese government has already invested in a long-term plan to make China self-sufficient and continues to provide cheap, large-scale labor despite a shrinking population.
GlobalData predicts that a cheap and rapid transition to green energy will require continued dependence on China.
“In Data: Australia and EU Sign Mineral Trade Deal as Supply Chain Disruption Grows” was originally created and published by Verdict, a brand owned by GlobalData.
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